A new car, a fancy TV, a college education: People are often enamored with the things that they expect to get when they borrow money. But hidden behind all the attractive gains are a whole lot of losses.

In almost every situation, borrowing money to get stuff is a bum deal. Yes, borrowing money helps you to purchase something before you’ve saved the money to buy it outright. But getting that stuff comes at a high price — when you borrow money, you give up a lot of things. In the end, you lose more than you get.

Debt causes us to lose things that are both tangible and intangible. Here are five of the most important things you lose when you borrow money:

1) Money

Yes, you read that right — borrowing money causes you to lose money. It’s simple math.

Loans never come free (unless perhaps you borrow money from a friend or family member, which is a bad idea in its own right). The bank that you borrow from will always charge you interest on your loan. You pay that interest at the same time as you pay off the loan. The bigger the amount of the loan, and the longer you take in paying it back, the more you will end up paying in interest.

Interest may not seem like a big deal when it is expressed in percentage points. But over time, it amounts to tons of extra money that you pay. Financing a new car can cost you thousands of dollars over the life of a loan, and carrying a balance on a credit card will rack up interest payments as well. By the time you’ve cleared the debt, you’ve also given the bank a ton of extra money, for which you’ve received nothing in return.

2) Time

When you borrow money, you lose time. Why? Because you’ll eventually have to pay back the loan — and will have to work to earn the money to make the payments. The time it takes to earn that money and pay back the loans could be better used doing other things.

If you’ve ever met someone who has made a concerted effort to get out of debt, you’ve likely heard them talk about how long their journey took. That’s because it can take a lot of time to get out of debt, making small payments month after month, while the balance of the loans that you’ve taken weighs heavily on your mind. It can be a long and exhausting process.

Every month that you spend paying off debt is a month that you can’t be doing something better with your money. Time is the key ingredient that makes investments grow and that makes charitable giving fruitful. But you can’t invest or give if you’re struggling with debt, and so you lose the opportunity to take advantage of the time you have.

3) Flexibility

One of the great benefits of adulthood is having the autonomy and flexibility to make your own decisions and live your life the way that you want. But when you borrow money, you give up a fair amount of that flexibility.

Loans obligate you to make regular monthly payments to the bank until your debt is eradicated. It doesn’t matter what’s going on in your life, or what other things you want to do with your money — you have to make that payment or you’ll end up in big trouble.

Having these payments attached to you limits your flexibility in life. Want to go on the mission field? It will be difficult to do while you’re in debt. How about starting a business or leaving your job to pursue your passions full time? Those are great dreams, but you can’t afford to do it if you have big debt payments to make every month. Debt robs you of the flexibility to make decisions about your own life.

4) Independence

Each time you borrow money, you give the bank a little bit more control over your life. Why? Because, as Proverbs 22:7 says, “The borrower is slave to the lender.”

At best, this slavery manifests itself in the lack of flexibility described above. But the problem can get much worse than that: Debt can quickly become an addiction, trapping people in cycles of borrowing and payments that they never escape from.

When you borrow money, the payments that you have to make can prevent you from saving cash to take care of other life expenses that are coming up. When those expenses arise, you borrow more money to cover them, which leaves you stuck with even more payments. When the cycle gets too vicious, people can end up borrowing from one lender just to pay another. Borrowing money strips you of your independence and makes you a slave to your lender.

5) Security

When you borrow money, you add risk to your life. And the more risk you carry, the less security you really have.

The risks of debt have to do with the way that borrowing puts obligations on your money. When you have payments to make, you don’t have the cash you need to cover the emergency situations that inevitably arise in life. That leaves you with an impossible choice: You can ignore your important needs to continue making your payments, or stop making your payments to take care of your needs, and risk bankruptcy, repossession and foreclosure. Either way, you’re in trouble.

We spend a lot of time and money trying to remove the risk from our lives and keep ourselves safe. So why would you add risk to your life by borrowing money? If you’re wise, you won’t.

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Photo by Paul Bica. Used under Creative Commons License.